Pages

Tuesday, October 27, 2015

Thrifty Thinking: Three Tips to Maximize Your Benefit from the American Association of Orthodontists

Approximately
33 million Americans* will soon be asked by their employers to consider
funding their Flexible Spending Accounts (FSA) for 2016.

FSAs are
a cost-saving way to set aside funds to pay for healthcare services and
items that are not covered by insurance, such as dental care,
orthodontic treatment, doctor co-payments, prescription drugs, and
medical supplies. All the funds accumulated in the accounts are
tax-free. The current law allows individuals to set aside $2,550 per
year. A husband and wife whose employers offer the FSA benefit may each
set aside up to $2,550 for 2016. A 2013 enhancement to the law allows
account holders to roll over up to $500 of unused funds into the
following year.

Because orthodontic
treatment is one of the few medical expenses one can anticipate, many
financial planners include planning for it when working with families.
“Orthodontics is something we absolutely discuss in our practice,” says
Marguerita Cheng, CFP, a planner with Blue Ocean Global Wealth in
Potomac, Maryland. “Our number of adults who are opting for
[orthodontic] treatment is growing all the time, making this
conversation relevant at all ages. We have many clients in their 40’s
and 50’s who are in treatment.”

1.An FSA saves you money on taxes.

All FSA contributions are tax-free. “If
your family is paying for orthodontic treatment, it’s better to utilize
tax-advantaged benefits such as FSAs or HSAs (Health Savings Accounts)
rather than simply paying out of pocket,” says Travis W. Freeman, CFP,
and president of St. Louis-based Four Seasons Financial Education, a
firm that advises employees on how to maximize their benefits. “Never
depend on credit cards to pay for treatment. If you must, temporarily
lower your 401(k) deferrals, or rely on a home equity loan, and place
this cash in your FSA.”

2.Many orthodontists will work the “use it or lose it” rule to your advantage.

In
most cases you’ll lose most of your FSA stash if you don’t use it at
the end of the year ($500 may be rolled over), but many orthodontists
will help you use remaining funds to pay for treatment in the current
calendar year. “Check with your orthodontist’s office to see if they can
help you at year end,” says Morris N. Poole, DDS, president of the
American Association of Orthodontists. “This is a good way to ensure
that you use all the funds you worked so hard to save.”

3.Ask about payment plans. Most
orthodontists offer a variety of payment plans to make treatment
affordable. In addition, many employers offer dental insurance that
includes orthodontic benefits to cover a portion of the fee for care.
“Orthodontists are accustomed to working with families that often are
juggling other expenses,” says Dr. Poole. “By using a well-planned
tax-deferred FSA, combined with payment options offered by the
orthodontist and other available benefits, orthodontic care is within
the means of most families. The benefits of orthodontic treatment are
lifelong, and can be one of the best investments families can make in
their health and well-being,” concludes Dr. Poole.

Founded
in 1900, the American Association of Orthodontists (AAO) is the world’s
oldest and largest dental specialty organization. It represents more
than 18,000 orthodontist members throughout the United States, Canada
and abroad. The AAO encourages and sponsors key research to enable its
members to provide the highest quality of care to patients, and is
committed to educating the public about the need for, and benefits of,
orthodontic treatment.

Orthodontists
are uniquely qualified specialists who diagnose, prevent and treat
dental and facial irregularities to correctly align teeth and jaws.
Orthodontists receive an additional two to three years of specialized
education in orthodontics beyond dental school at an accredited
orthodontic residency program. Visit the AAO’s websites,
mylifemysmile.org and aaoinfo.org, for information about orthodontists,
orthodontic care and to locate nearby orthodontists.